Why is the Mafia investing in renewable energy?

The renewable energy industry is apparently becoming a favorite playground for the underworld, Alic writes. Lucrative government subsidies for the construction of wind farms and a fairly lax regulatory system have made renewable energy attractive to the Mafia.

David Vincent/AP/File

A wind turbine erected in Le Carnet, western France. The uncomfortable truth for Italy is that its high-ranking status as an ambitious installer of renewable energy programs—particularly wind—has been achieved on a significant level in the underworld, Alic writes.

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April 5, 2013

By Jen AlicGuest blogger

When the Italian authorities seized $1.7 billion in mafia-linked assets this week, many were surprised to see learn that the renewable energy industry is apparently becoming a favorite playground for the underworld.

The assets seized included 43 wind and solar energy companies, along with 66 bank accounts linked to mafiosa Vito Nicastri—also now known as the “Lord of the Wind”.

This came as a surprise only to those who haven’t been following the renewable energy industry in Europe closely. In 2010, Italian authorities froze Nicastri’s assets after an investigation turned up evidence that the Mafia was actually using renewable energy projects to launder money.

Nicastri is now under house arrest and heavy surveillance and will remain so for the next three years while authorities make the case against him. He is accused of declaring only a fraction of the value of his alternative energy business in his taxes.

The uncomfortable truth for Italy is that its high-ranking status as an ambitious installer of renewable energy programs—particularly wind—has been achieved on a significant level in the underworld. The country generates more than 5,000 megawatts of wind energy from nearly 300 wind farms.

What has attracted the Mafia to the renewable energy scene? That’s easy: lucrative government subsidies for the construction of wind farms and a fairly lax regulatory system. Geography has also played a role: The wind farms are largely in the country’s south where the Mafia enjoys a strong presence and where they control much of the land. These farms—and other subsidized renewable energy projects—are convenient venues for laundering money.(Related article: The Mafia is Moving into Renewable Energy)

As reported by Agence France Presse, Arturo de Felice, head of Italy’s anti-mafia agency, said the renewable energy sector in one “in which money can easily be laundered. Operating in a grey area helped [Nicastri] build up his business over the years.”

The Italian asset seizure is likely to bring more scrutiny to the renewable energy business—as well as subsidy programs—across Europe. And certainly Italy isn’t the only venue where Mafia is taking advantage of state-supported renewable energy ambitions.

According to Sarajevo-based ISA Intel, which conducts investigations across Europe, the Middle East and Africa, there is also emerging evidence that the Greek underworld is dabbling in renewable energy as well, laundering money from oil smuggling and other criminal operations through subsidized renewable energy projects.